Office on the iPad and Hotmail contrition signal that Microsoft has hit a milestone in the journey toward open source licensing

Last summer I wrote, "But with the right choice [of CEO], this could be the moment for Microsoft to break out of the trap its past success created and finally embrace open source in a way that wins in the market."

That hasn't happened yet, but two remarkable developments last week suggest the change may be possible. As I noted in that article, the journey to open source passes through a place of leadership change. Microsoft's promotion of Satya Nadella to the helm could prove to be the change that unlocks progress.

Last week we saw three significant fruits of new leadership. First, Microsoft released a major product on a competitor's platform. Office for the iPad has been an instant hit. Though the software must have been waiting in the wings, I question whether it would have been released under Ballmer.

The reason? The Microsoft of the Gates and Ballmer mindset would not have tolerated releasing an app that worked better on the iPad than it did on the Surface. But the Microsoft of Nadella did. This suggests market realities are being allowed to dominate rather than internal dogma. That's the same transition that will be needed if Microsoft is to truly embrace open source and not just exploit it without commitment to the communities around each code commons.

Second, it emerged that Microsoft, in pursuit of a copyright misuse mediated by an employee, discovered some of the evidence was to be obtained in someone else's Hotmail account. Since the terms of use allow the company to read whatever mail it wishes, it went in to the mailbox and took a look. But many people felt "legal" was not equivalent to "ethical," especially from a company trying to frame a competitor for the same attitude with its "Scroogled" campaign.

Called on this legal but morally questionable abuse of rights, Microsoft fessed up instead of staying silent. It's gone further, changing its policy so that similar future cases would be handed to the police and is embarking on a public discussion of how such situations should be handled. It's even been congratulated by the EFF. This suggests that Nadella's Microsoft could be finding its moral compass. Of course, it will take many more cases to rebuild the trust lost over many years by the open source community, but this outcome could not have happened in Gates and Ballmer's Microsoft.

The third example suggests Microsoft still hasn't completely understood the dynamics of the peer culture the Internet has created. It stayed true to character in releasing historic MS-DOS code under a license that prevents it being useful to anyone. I speculated on the reasons for this (the company still hasn't offered an explanation), but whatever they are, the incident shows Nadella's Microsoft has still not grasped the idea that, in the meshed society, we see furthest when we can stand on the shoulders of giants, not just admire their stature from a distance.

These three cases may give an insight into the evolving culture inside Microsoft. Are we seeing the Microsoft finally move beyond the internally competitive culture of Gates and Ballmer? If we are, it's possible that the company now has the leader to progress beyond stage four of my seven-step outline and actually embrace open source as a path to profit.